ETS Group Nine-Month Operating Profit Jumps 71% to ¥949 Million; Full-Year Guidance and Dividend Raised

ETS Group Co., Ltd. (TSE: 253A), a Tokyo-based holding company whose subsidiaries build overhead power transmission lines, extra-high-voltage substations and electrical installations — and which also runs a condominium- and rental-management arm — reported consolidated results for the first nine months of the fiscal year ending September 2026 under Japanese GAAP. The period covers October 1, 2025 to June 30, 2026. Net sales rose 9.3% to ¥8,738 million, operating profit surged 71.0% to ¥949 million, ordinary profit climbed 61.6% to ¥876 million, and profit attributable to owners of the parent advanced 57.9% to ¥519 million. Basic earnings per share were ¥81.54, up from ¥51.64. Comprehensive income rose 58.6% to ¥526 million.

Margins recover as the backlog is worked down

Gross profit grew far faster than sales, rising 33.0% to ¥1,741 million, and the operating margin widened to 10.9% from 6.9% a year earlier. Management attributed the improvement chiefly to better job profitability in the power-utility construction work inside the electrical-works segment. Consolidated orders received, however, fell 78.7% to ¥3,012 million from ¥14,154 million, as the group deliberately held back on new bookings to prioritise execution of the unusually large order book taken in the prior year. Ordinary profit grew more slowly than operating profit because non-operating expenses roughly tripled to ¥90 million from ¥29 million, including ¥37 million of interest costs and a ¥20 million buried-cultural-property excavation survey charge.

Electrical works drives the profit swing; power sales still in the red

The Electrical Works segment lifted external sales 8.6% to ¥7,341 million and almost doubled segment profit, up 96.3% to ¥805 million from ¥410 million. The Real-Estate-Related segment grew external sales 12.7% to ¥1,379 million (¥1,385 million including intersegment revenue, up 13.0%) and raised segment profit 14.3% to ¥129 million, helped by steady building-management work and the newly acquired Hiroshima property-management business. The unreported "Other" category — a power-generation and electricity-sales operation — remained loss-making at ¥18 million of sales and a segment loss of ¥9 million, although that loss narrowed from ¥15 million. Reportable segment profit of ¥934 million reconciles to the ¥949 million consolidated operating profit after a net ¥25 million adjustment covering intersegment eliminations and unallocated holding-company income.

Full-year guidance raised

ETS Group revised its FY9/2026 full-year forecasts upward on the same day, replacing the guidance issued on November 14, 2025. It now expects net sales of ¥12,250 million (+8.8%), operating profit of ¥1,078 million (+50.3%), ordinary profit of ¥988 million (+43.1%) and net profit attributable to owners of ¥564 million (+20.9%), with EPS of ¥88.56. The nine-month result already represents about 88% of the upgraded full-year operating-profit target and roughly 92% of the net-profit target, leaving a modest final quarter implied. FY9/2026 is the closing year of the group's three-year medium-term management plan.

Dividend lifted 35% to ¥23.00

The company kept its dividend forecast unchanged from the prior announcement, at a year-end-only payment of ¥23.00 per share for a full-year total of ¥23.00 — up 35.3% from the ¥17.00 paid for FY9/2025. Against forecast EPS of ¥88.56 that implies a payout ratio of about 26%. No interim dividend is paid.

Balance sheet strengthens

Total assets rose ¥201 million from the September 2025 year-end to ¥9,471 million, while total liabilities fell ¥216 million to ¥5,608 million and net assets grew ¥417 million to ¥3,862 million. The equity ratio improved to 40.8% from 37.2%. Cash and deposits climbed ¥1,017 million, offsetting a ¥756 million decline in trade receivables and contract assets; on the liability side, a ¥643 million increase in long-term borrowings was more than covered by a ¥704 million fall in contract liabilities and a ¥400 million reduction in short-term borrowings. Retained earnings added ¥455 million. Subsidiary ETSOK Co., Ltd. absorbed the property-management business of Ams International via a company split during the quarter, provisionally recognising ¥258 million of goodwill.

A thinly capitalised newcomer to the market

ETS Group has just 6,368,903 shares issued and a single treasury share, making it one of the smaller listed contractors in Japan's electrical-infrastructure supply chain. Its business is geared to domestic power-grid investment and to private-sector capital spending, which the company describes as remaining firm despite persistent increases in materials and labour costs. The quarterly financial statements were not subject to audit or review by a certified public accountant, and no quarterly consolidated statement of cash flows was prepared; depreciation for the nine months was ¥147 million and goodwill amortisation ¥2 million.

JapanStockPulse provides informational content only and does not constitute investment advice. Figures are taken from the company's published earnings short report and may be subject to subsequent revision.